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Please excuse me if this is a foolish or uneducated question, but does anyone have any experience with shifting shares from a Trading account to an ISA account when those shares are hotly desired?
Simply, I have a small holding in GGP which I feel will grow to beyond the CGT threshold. I would like to protect that profit, obviously, and understand one route is by ordering my broker - Interactive Investor - to perform a Bed and ISA on my shares.
That's fine, but I have no problem admitting I'm wary about losing any of these shares; they are chickenfeed to most of you, but significantly valuable to me.
Quite simply, I don't want to order this transfer only to find the second my shares hit the market they are gobbled up by nea'r do wells and I'm left without my holdings.
Can anyone with experience of this process provide any reassurance? Thank you!
I did it with Halifax. They sold and bought at the best price available at the time I lost a few shares due to charges and spread bit nothing to cry about really
If your broker/bank does a Bed and Isa then its straight forward as they sell and buy at the same time...however some are not offering the service during the pandemic. With Bed and ISA you will lose some shares as there is a difference obviously between the sale price and the purchase price plus trading fees and stamp duty. I normally ask them to buy back the same number of shares and pay the extra when I am charged for the trade. My bank is currently not offering the service and say I should sell and buy back in my ISA account. This takes 2 or 3 days. You run the risk then of good news dropping and the share price going up and having to buy at a higher price. I might do that after an RNS and the price goes up. Even then it means you can buy less in your ISA as the limit is financial not the number of shares. I think II are still offering a Bed and ISA if you have the £20,000 in cash to start with.
Hi BI
In similar boat to yourself. My plan, already underway , is open up a new ISA s&s account (212 do it free) and gradually shift over blocks of a few thousand shares from your TA. It’s seems very few offer ISA conversion without selling up your entire holding. Something I wouldn’t want to do either.
Best, 205
I did a bed in ISA in December with Barclays smartinvestor. I did it myself and was out of the market for 5 mind max.
Thanks all for both your advice and experiences. I'm feeling a lot better about making this move now :)
Hi, I'm with Share Centre. I just phoned them up and asked them to do a Bed&ISA of sufficient size to use up the room in my ISA. The buy and sell happened within seconds of each other so just the charges and 1% or so buy/sell spread. Compared to the potential CGT savings it is well worth it.
With Share Centre I can sell shares and reinvest the proceeds immediately without waiting 3 days for settlement. Don't they all offer this service?
BabyInv,
You could do it yourself with interactive investor.
1. Sell shares in your trading account.
2. Transfer sales cash from Trading to ISA account just look at cash transfer menu. (Also, assuming you have enough of your £20K ISA allowance left)
3. Re-Purchase your GGP shares in your ISA.
Job done!
3.
No ! If you rely on email instructions, it can take days. The spread and price can move against you! I tried through X-O sharedealing, after waiting two days I cancelled the instructions, got well narked and took trading and isa accounts to ii sharedealing. The thought of loosing 5% through spread on One of my GGP pots was too much to bear. Hindsight not sure, 5% of 20k at sub 3p. How much would those lost shares be worth at 37p. Answer @ 35p profit the 5% spread loss would now have cost me £11,333. Hell!
Unfortunately not, else they would be out of business. It has to be done by the stockbroker, or everyone would do jt.
Baby Investor - I too, was in a very similar position. I decided to bite the bullet short term; to lose out on a few shares due to the spread/fees, as I sold and transferred from my normal account to an ISA. That short term loss is now dwarfed by the saving I will make on CGT.
I had now problem buying back the shares either. My orders went straight through
Jiffy
Once you've sold the shares in your trading account, will the cash be immediately available to transfer into your ISA to rebuy into your ISA. Or would you have to wait a few days.
Be clear please !! You instructed your broker ! You didn't personally sell the shares, move the funds , then repurchase the stock!
Giving the wrong impression, can lead to the inexperienced getting up s h one t creek !
Jiffy
Once you've sold the shares in your trading account, will the cash be immediately available to transfer into your ISA to rebuy into your ISA. Or would you have to wait a few days.
No!, normally available when the cash is showing up in your trading account, ie within an hour at tops, most likely less, has been in my experience, and have done so.
Just to add, with a DIY route, via Interactive investor, (no idea about other platforms, as may not be available) make sure you have sufficient unused ISA allowance, ie you haven't already topped up your ISA with the current tax year £20K allowance. Otherwise you will have to wait for the next tax year in April 2021.
I’m in a similar predicament with me ending up with a sizeable portion of my investment avg at 13p outside of isa...on 212 I don’t think I am able for an automated bed and isa at the end if that’s correct. if I sell the shares then rebuy including the profit although my avg will show to be higher im essentially buying the same amount of stock? Example in trading 1000 to 1500 with proffit buy 1500 in isa it’s the same?
With profit I mean with the profits from selling I could rebuy 500 more stocks so my 1500stocks at a higher price is equal to my 1000 at a lower as it is the same monetary value?
Noobz,
Forget profit, think only of trading account /cash sale versus already used £20k isa allowance per tax year per ISA, think in cash terms only!!
ie You have only deposited £16K into your ISA for the tax year 2020/21, you therefore have a remaining cash deposit allowance into your ISA account of £4K.if you have no allowance left then you will have to wait till Apr 2021.
I do wonder how many folk actually understand the rules of operating an ISA account.
No I’m completely fine with the concept of it I just was a twat and brought my second round at 13p in my invest by accident knowing the benifits of isa :/ I don’t want to loose that average and future gains if I bed and end up with a new avg of 33 over 13 this is what I’m not sure about...
Baby Investor - looks like a there could be some confusing information. What I know is that if you have a share dealing and S&S ISA account with IG then if you sell the shares yourself, then you have to wait 2 days for the funds to clear before you can transfer them into your ISA and re-buy the shares; It could be similar with other companies.
The best thing to do is call Interactive Investor and if they offer Bed & ISA and do it that way.
Noobz don't worry about your average. In your ISA on day one, the average will be the price you have just paid for the shares. And that sets the new baseline for showing any percentage change in value of your holding.
You will still know how you made your money. You just won't have the ready figure for self-ego-massaging or willy-waving
Spot on floater. There is a two day delay in being able to do anything with the cash as every broker operates on T+2 to actually clear the cash. (Some offer even longer settlement terms but let's not discuss that kettle of fish.....)
This can be confusing cos you can buy shares in the same account within seconds using your sale proceeds as the funds will be credited to your trading balance. This makes sense if you consider your buy trade that you are doing is also on a T+2 settlement date. So you sell and buy on say Monday, but all the cash won't be given and handed back over to the market makers until the Wednesday.
So even if you have a trading account and ISA with the same broker, say ii for example, if you sell shares in the trading account on the Monday you won't be able to move the resultant cash into your ISA account until it is cleared on the Wednesday. The folks at ii can however do a Bed&ISA transaction on your behalf where all of this is done within minutes - so you should only pay dealing charges (£7.95 typically twice) plus the spread between by and sell prices which should be a fraction of 1% at the instant of the transaction.
Ii do this easily. I think X-O can't and have to wait for funds to clear two days later.
My solution was to fund my ISA with spare cash, buy GGP, and then sell a matching quantity of shares from my trading account. Repeat until your £20k annual investment limit is reached.
Have discovered selling GGP is very difficult. Caught myself buying them again yesterday..... Couldn't resist a nice dip. Will be hitting that sell button for sure before the end of the tax year to manage capital gains.